长实集团(01113) - 2025 - 中期财报

Company Information and Key Dates This section provides essential corporate details, including board composition, committee structures, senior advisory roles, and critical financial dates and contact information Board of Directors The Board of Directors is led by Chairman and Managing Director Mr. Victor T.K. Li, with diverse representation including Deputy Managing Directors, Vice Chairman, Executive Directors, and Independent Non-Executive Directors - Chairman and Managing Director is Victor T.K. Li[6] - Board members include Deputy Managing Director Kam Hing Lam, Vice Chairman Ip Tak Chuen, several Executive Directors, and Independent Non-Executive Directors[6] Committees and Senior Advisor The company has an Audit Committee, Remuneration Committee, Nomination Committee, and Sustainability Committee, with Mr. Li Ka-shing serving as Senior Advisor providing strategic guidance and oversight - Mr. Li Ka-shing serves as Senior Advisor[7] - Committees include the Audit Committee (Chairman: Albert T.Y. Cheung), Remuneration Committee (Chairman: Hon. Helen P.W. Hong), Nomination Committee (Chairman: Barnaby L.B. St. P. Roberts), and Sustainability Committee (Chairman: Ip Tak Chuen)[7] Key Dates and Contact Information The report lists interim results announcement, interim dividend record and payment dates, along with company stock codes, website, principal place of business, and share registrar 2025 Key Dates | Event | Date | | :--- | :--- | | Interim Results Announcement | August 14, 2025 | | Interim Dividend Record Date | September 16, 2025 | | Interim Dividend Payment | September 25, 2025 | - Company stock codes are HKEX 1113, Bloomberg 1113 HK, and Reuters 1113.HK[7] - Principal place of business is 7/F, Cheung Kong Center, 2 Queen's Road Central, Hong Kong[8] Chairman's Business Report This report provides an overview of the company's performance, strategic initiatives, sustainability efforts, and future outlook amidst global economic complexities Performance Summary and Interim Dividend For the six months ended June 30, 2025, profit before revaluation of investment properties increased by 1.6% year-on-year, but profit attributable to shareholders decreased by 26.2% due to a loss from investment property revaluation, with the interim dividend maintained at HKD 0.39 per share 2025 Half-Year Performance Summary | Metric | 2025 (HKD Million) | 2024 (HKD Million) | Change | | :--- | :--- | :--- | :--- | | Profit before revaluation of investment properties | 6,805 | 6,726 | +1.6% | | Revaluation of investment properties (net of tax and non-controlling interests) | (503) | 1,877 | - | | Profit attributable to shareholders | 6,302 | 8,603 | -26.2% | | Interim Dividend (per share in HKD) | 0.39 | 0.39 | – | - Earnings per share decreased from HKD 2.44 in 2024 to HKD 1.80 in 2025[10] - Interim dividend maintained at HKD 0.39 per share, payable on September 25, 2025[11] Business Review In the first half, the company expanded its social infrastructure investment portfolio and participated in infrastructure projects to enhance diversified recurring income amidst global economic uncertainty, while property sales revenue increased but profit decreased, and other segments saw mixed performance - The Group adheres to strict financial discipline, expanding its social infrastructure investment portfolio to strengthen its diversified recurring income base[12] - Property sales revenue increased, but related profit decreased due to a weak market and discounts offered[13] - Property leasing revenue and profit slightly decreased, affected by the weak retail and commercial property markets in Hong Kong[14] - Hotel and serviced suite business revenue saw moderate growth, but profit slightly decreased due to industry cost pressures and lower average room rates[16] - Pub business revenue and profit both increased compared to the same period last year, despite operating cost pressures and changing consumer habits[17] - Infrastructure and utility assets business recorded robust growth in revenue and profit, maintaining an appropriate gearing ratio and resilience against inflation and high interest rates[18] - A joint venture agreed to sell all interests in Eversholt UK Rails, with the transaction expected to complete in several months[19] Sustainability The company actively addresses climate change risks, having achieved Science Based Targets initiative (SBTi) certification and committing to a net-zero transition plan, with property development projects consistently winning green building awards - The Group has obtained Science Based Targets initiative (SBTi) certification for its short-term emission reduction targets and net-zero targets[20] - Greene King also received SBTi recognition for its 2040 net-zero target and re-certification for its short-term target of halving greenhouse gas emissions by 2030[20] - Cheung Kong Center II was awarded the Final Platinum rating under BEAM Plus New Buildings (Version 2.0), and Perfect Ten received a Five-Star Award at the Asia Pacific Property Awards[20] Outlook Facing a complex global economic environment, the company will maintain a solid and diversified investment and asset portfolio, leveraging its financial strength and low gearing ratio to seize market opportunities, drive long-term development, and deliver stable shareholder returns - The global economic environment is complex and volatile, influenced by geopolitical conflicts, policy changes, and trade tensions[21] - Mainland China's economy continues to improve, with GDP growing 5.3% year-on-year in the first half, while Hong Kong's real GDP rose approximately 3% year-on-year in the first half[21][23] - The Group will maintain a solid and diversified investment portfolio, with a net debt to total capital ratio of approximately 5.0%, and credit ratings of "A / Stable" from S&P and "A2 Stable" from Moody's[23] Management Discussion and Analysis This section provides a detailed review of the company's operational performance across key business segments, financial position, and risk management strategies Business Review This section details the company's performance across its main business segments in the first half of 2025, including property sales, leasing, hotels, property management, pub operations, and infrastructure assets, providing key financial data and business updates Principal Business Activities The company lists property projects completed and expected to be completed in 2025, and updated its US$5 billion Euro Medium Term Note Programme to support future development - Completed and expected property projects include The Coastline II and Blue Coast in Hong Kong, Perfect Ten in Singapore, and multiple projects in Mainland China (Shanghai, Chongqing, Dongguan, Dalian, Guangzhou, Huizhou, Wuhan) and London[26] - The US$5 billion Euro Medium Term Note Programme was updated and listed on the Hong Kong Stock Exchange on June 23, 2025[27] Property Sales Half-year property sales revenue significantly increased to HKD 7.366 billion, primarily from projects in Hong Kong, Mainland China, and overseas, but sales profit decreased due to market weakness and discounts Half-Year Property Sales Revenue (including share of joint ventures) | Region | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 2,803 | 2,601 | | Mainland China | 3,827 | 1,761 | | Overseas | 736 | 273 | | Total | 7,366 | 4,635 | Half-Year Property Sales Profit | Region | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 74 | 1,044 | | Mainland China | 1,469 | 710 | | Overseas | 225 | 67 | | Total | 1,768 | 1,821 | - Property sales revenue increased year-on-year, but sales profit decreased, mainly due to lower profit margins from discounts offered in a weak market[29] - As of June 30, 2025, total contracted but unrecognised property sales amounted to HKD 28.553 billion, with Hong Kong accounting for HKD 22.102 billion[30] - The Group holds a land bank of approximately 67 million sq ft for development, including 6 million sq ft in Hong Kong, 58 million sq ft in Mainland China, and 3 million sq ft overseas[30] Property Leasing Half-year property leasing revenue and profit both decreased year-on-year, primarily due to the termination of rental income from Shanghai Meilongzhen Plaza in Mainland China and a quiet retail and office leasing market in Hong Kong Half-Year Property Leasing Revenue (including share of joint ventures) | Property Use | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Retail | 859 | 971 | | Office | 871 | 890 | | Industrial | 386 | 385 | | Social Infrastructure | 671 | 648 | | Other | 215 | 224 | | Total | 3,002 | 3,118 | Half-Year Property Leasing Profit | Region | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 1,745 | 1,816 | | Mainland China | 78 | 139 | | Overseas | 492 | 489 | | Total | 2,315 | 2,444 | - Property leasing revenue and profit decreased, mainly due to the termination of rental income from Shanghai Meilongzhen Plaza in Mainland China and the continued quiet retail and office leasing markets in Hong Kong[31] - The Group holds an investment property portfolio of approximately 22.4 million sq ft and recorded a fair value decrease of HKD 542 million (2024: increase of HKD 1.42 billion) for investment properties[33] Hotel and Serviced Suite Business Half-year hotel and serviced suite business revenue slightly increased to HKD 2.192 billion, with average occupancy rates of 89% and 88% respectively, but profit was slightly lower than the prior year due to reduced per capita spending - Half-year hotel and serviced suite business revenue was HKD 2.192 billion (2024: HKD 2.130 billion), recording a slight increase[34] - Average occupancy rates for hotels and serviced suites during the period were 89% and 88% respectively[34] Half-Year Hotel and Serviced Suite Business Profit | Region | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 816 | 853 | | Mainland China | (22) | (30) | | Total | 794 | 823 | Property and Project Management Half-year property and project management revenue remained stable compared to the prior year, with a slight increase in profit, as the Group manages approximately 248 million sq ft of properties primarily in Hong Kong and Mainland China - Half-year property and project management revenue was HKD 444 million (2024: HKD 445 million), remaining largely stable[35] Half-Year Property and Project Management Profit | Region | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Hong Kong | 134 | 143 | | Mainland China | 22 | 20 | | Overseas | 26 | 17 | | Total | 182 | 180 | - The Group manages approximately 248 million sq ft of properties, primarily located in Hong Kong and Mainland China[35] Pub Business Half-year pub business revenue increased to HKD 12.524 billion, with profit also rising, driven by price adjustments and local currency appreciation, despite challenges from weak consumer confidence and high labor costs - Half-year pub business revenue was HKD 12.524 billion (2024: HKD 11.823 billion), an increase of HKD 701 million year-on-year[36] - Profit was HKD 629 million (2024: HKD 597 million), showing an increase[37] - Revenue growth was primarily driven by price adjustments and local currency appreciation[36] Infrastructure and Utility Assets Business The Group's infrastructure and utility assets investment portfolio continued to provide stable recurring income, with half-year share of joint ventures' revenue growing to HKD 13.598 billion and profit steadily increasing to HKD 4.576 billion Half-Year Group's Share of Joint Ventures' Revenue | Project | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | CK William JV | 2,482 | 2,366 | | CKP (Canada) JV | 2,356 | 2,325 | | ista JV | 3,791 | 3,467 | | UK Power Networks JV | 2,028 | 1,835 | | Northumbrian Water JV | 1,536 | 1,337 | | Dutch Enviro Energy JV | 397 | 342 | | Wales & West Utilities JV | 668 | 590 | | UK Rails JV | 340 | 314 | | Total | 13,598 | 12,576 | Half-Year Profit (by Region) | Region | 2025 Total (HKD Million) | 2024 Total (HKD Million) | | :--- | :--- | :--- | | Australia | 589 | 720 | | Europe | 3,281 | 3,281 | | North America | 706 | 732 | | Total | 4,576 | 4,098 | - The infrastructure and utility assets business continues to provide stable recurring income, with its business revenue and related assets resilient against macroeconomic changes such as inflation and high interest rates[18] Interests in Real Estate Investment Trusts The Group holds interests in Hui Xian REIT, Fortune REIT, and Prosperity REIT, reporting a share of Hui Xian REIT's net profit of HKD 77 million and receiving distributions of HKD 107 million from Fortune and Prosperity REITs, with an increase in investment fair value - The Group holds interests of 35.4% in Hui Xian REIT, 25.7% in Fortune REIT, and 17.6% in Prosperity REIT[41] - Half-year share of Hui Xian REIT's net profit was HKD 77 million (2024: loss of HKD 4 million)[41] - Distributions received from Fortune REIT and Prosperity REIT amounted to HKD 107 million (2024: HKD 113 million)[41] - Investments in Fortune REIT and Prosperity REIT recorded a fair value increase of HKD 475 million (2024: decrease of HKD 634 million)[41] Financial Overview The company maintains a robust financial position with net debt of approximately HKD 21.4 billion and a net debt to total capital ratio of about 5%, employing prudent financial policies including hedging tools to manage foreign exchange and interest rate risks - As of the interim balance sheet date, the Group's total bank and other borrowings amounted to HKD 54.4 billion, an increase of HKD 1.7 billion compared to December 31, 2024[42] - After accounting for bank balances and time deposits of HKD 33.0 billion, net debt was HKD 21.4 billion, with a net debt to total capital ratio of approximately 5%[42] - The Group adopts a prudent approach to managing foreign exchange risk, maintaining an appropriate mix of floating and fixed-rate borrowings to mitigate interest rate risk, and utilizing hedging instruments[43] - As of the interim balance sheet date, approximately 32% of borrowings were HKD/USD, and 68% were foreign currencies; after hedging, approximately 54% were floating-rate and 46% were fixed-rate[43] - Properties valued at HKD 7.43 billion were pledged for bank borrowings for property development and investment, and properties valued at HKD 27.475 billion were pledged for other borrowings for the pub business[45] - Contingent liabilities include HKD 427 million for the landlord's share of income from hotel projects and HKD 1.395 billion for mortgage loans to property buyers for Mainland China development projects[46] - The Group employs approximately 55,000 staff, with employee costs of approximately HKD 6.878 billion during the period[47] Directors' Personal Information This section provides detailed profiles of the company's executive and independent non-executive directors, highlighting their professional backgrounds, qualifications, and roles within the Cheung Kong Group and other listed companies Executive Directors' Profiles This section details the personal backgrounds, professional qualifications, roles within the Cheung Kong Group and other listed companies, and social and academic contributions of the company's executive directors - Mr. Victor T.K. Li serves as Chairman and Managing Director, and is also Chairman or Executive Director of Cheung Kong (Holdings) Limited, CK Infrastructure Holdings Limited, and CK Life Sciences Int'l (Holdings) Inc[48] - Mr. Kam Hing Lam is Deputy Managing Director, holding various senior positions within the Cheung Kong Group, and holds a Bachelor of Engineering and an MBA degree[49] - Mr. Ip Tak Chuen is Vice Chairman, also serving as Deputy Managing Director of CK Hutchison Holdings Limited and Executive Director and Vice Chairman of CK Infrastructure Holdings Limited[50] - Dr. Edmond K.M. Chiu is an Executive Director with over 40 years of international property business experience, holding key positions in several real estate investment trusts[51] Independent Non-Executive Directors' Profiles This section introduces the professional backgrounds, roles in audit, remuneration, nomination, and sustainability committees, and experience in other listed companies and public service of the company's independent non-executive directors, ensuring board independence and professionalism - Mr. Albert T.Y. Cheung is an Independent Non-Executive Director and Chairman of the Audit Committee, also serving as an Independent Non-Executive Director for several listed companies[53] - Hon. Helen P.W. Hong is an Independent Non-Executive Director and Chairman of the Remuneration Committee, holding honorary positions at institutions such as The Hong Kong Polytechnic University[54] - Mr. Andrew J.L. Roberts is an Independent Non-Executive Director and member of the Audit Committee, formerly Deputy Finance Director of Hutchison Whampoa Group, with extensive experience in accounting[55] - Mr. Barnaby L.B. St. P. Roberts is an Independent Non-Executive Director and Chairman of the Nomination Committee, having held various key positions in the UK Foreign Office and extensive experience in the private sector[56] - Ms. Margaret L.M. Li is an Independent Non-Executive Director and member of the Audit Committee, formerly Deputy Chairman and Chief Executive of Hang Seng Bank[60] Disclosure of Interests This section details the interests and short positions of directors and major shareholders in the company's shares, underlying shares, and debentures, highlighting significant holdings and beneficial ownership structures Directors' Interests and Short Positions in Shares, Underlying Shares, and Debentures This section discloses the long positions of the company's directors and chief executive in the shares of the company and its associated corporations, with Mr. Victor T.K. Li holding approximately 48.87% of the company's equity, primarily through controlled corporations and as a trust beneficiary Directors' Long Positions in the Company's Shares (as of June 30, 2025) | Director Name | Capacity | Number of Ordinary Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Victor T.K. Li | Beneficial Owner, Interests of Child or Spouse, Interests in Controlled Corporations, and Trust Beneficiary | 1,710,382,393 | 48.87% | | Kam Hing Lam | Beneficial Owner and Interests of Child or Spouse | 108,400 | 0.003% | | Ip Tak Chuen | Beneficial Owner | 900,000 | 0.02% | | Hon. Helen P.W. Hong | Beneficial Owner | 43,256 | 0.0012% | | Andrew J.L. Roberts | Jointly Held Interests | 10,396 | 0.0002% | | Frank J. Sixt | Spouse's Interests and Jointly Held Interests | 10,892 | 0.0003% | - Mr. Victor T.K. Li's interests primarily include shares held by the Li Ka Shing Foundation and through trust structures such as Li Ka-Shing Unity Trust and Li Ka-Shing Castle Trust[62][63][64] Shareholders' Interests and Short Positions This section discloses the long positions of major shareholders in the company's shares, with Li Ka-Shing Unity Trustee Company Limited holding approximately 33.48% as trustee, and Mr. Li Ka-shing holding approximately 48.78% through controlled corporations and as founder of discretionary trusts Major Shareholders' Long Positions in the Company's Shares (as of June 30, 2025) | Shareholder Name | Capacity | Number of Ordinary Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Li Ka-Shing Unity Trustee Company Limited as Trustee of The Li Ka-Shing Unity Trust | Trustee | 1,171,881,779 | 33.48% | | Li Ka-Shing Unity Trustee Corporation Limited as Trustee of The Li Ka-Shing Unity Discretionary Trust | Trustee and Trust Beneficiary | 1,171,881,779 | 33.48% | | Li Ka-Shing Unity Trustcorp Limited as Trustee of another Discretionary Trust | Trustee and Trust Beneficiary | 1,171,881,779 | 33.48% | | Li Ka-shing | (i) Interests in Controlled Corporations (ii) Founder of Discretionary Trusts | 1,707,484,843 | 48.78% | | Li Ka Shing Foundation Limited | Beneficial Owner | 378,788,098 | 10.82% | - Mr. Li Ka-shing's interests include shares held by the Li Ka Shing Foundation and shares held as the founder of multiple discretionary trusts[67][69] Corporate Governance This section outlines the company's commitment to maintaining high corporate governance standards, including board structure, risk management, internal controls, committee responsibilities, and investor relations Corporate Governance Practices and Board Operations The company is committed to high corporate governance standards, complying with Appendix C1 of the Listing Rules' Corporate Governance Code, and ensures oversight through a diverse board with independent non-executive directors, despite the combined roles of Chairman and Managing Director - The company complies with Appendix C1 of the HKEX Listing Rules' Corporate Governance Code, adhering to all code provisions except for the combined roles of Chairman and Managing Director[70][71] - The Board comprises 16 directors, including 7 Executive Directors and 9 Independent Non-Executive Directors, with more than half being Independent Non-Executive Directors[72] - The Chairman meets with Independent Non-Executive Directors twice a year, providing an exclusive platform to discuss company or business matters[73] - The company has adopted and regularly reviews comprehensive corporate governance policies such as the "Anti-Fraud and Anti-Bribery Policy," "Anti-Money Laundering Policy," and "Employee Code of Conduct"[71] Risk Management and Internal Control The company has established an internal audit mechanism to continuously and independently assess the effectiveness of its risk management and internal control systems, which were reviewed by the Audit Committee for the first half of the year - The company has established an internal audit mechanism to conduct continuous independent assessments of the Group's risk management and internal control systems[76] - Audit work primarily involves reviewing the effectiveness of financial, operational, and compliance controls, and identifying and assessing key risk matters[76] Responsibilities of Board Committees The Audit, Remuneration, Nomination, and Sustainability Committees each fulfill specific duties covering financial reporting, remuneration policies, board composition, and sustainability strategies to ensure the company operates in line with best practices - The Audit Committee, composed of 7 Independent Non-Executive Directors, is responsible for overseeing financial reporting, risk management, and internal control systems[77] - The Remuneration Committee advises the Board on remuneration policies and structures for directors and management[79] - The Nomination Committee reviews the Board's structure, size, and composition at least annually, and assesses the independence of Independent Non-Executive Directors[80] - The Sustainability Committee oversees the management of the Group's sustainability initiatives and provides advice on related policies and practices[81] Investor Relations and Shareholder Engagement The company maintains effective communication with shareholders and investors through various channels, including its website, general meetings, press conferences, and investor analyst briefings, ensuring information transparency and facilitating feedback - The company's shareholder communication policy is published on its website and regularly reviewed for implementation and effectiveness[82] - Communication channels include the company website, general meetings, press conferences, and investor analyst briefings[82] Other Information This section covers additional disclosures, including details on the purchase, sale, or redemption of listed securities and a comprehensive overview of various risk factors affecting the company's business and operations Purchase, Sale or Redemption of Listed Securities For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and no treasury shares were held - For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities[84] - As of June 30, 2025, neither the company nor its subsidiaries held any treasury shares[84] Risk Factors This section elaborates on various risks and uncertainties impacting the company's business, financial condition, operating results, and development prospects, covering macroeconomic, industry-specific, regulatory, operational, and strategic aspects Macroeconomic and Market Risks The company faces macroeconomic risks such as global economic slowdown, trade tensions, policy uncertainty, currency exchange rate fluctuations, interest rate changes, and commodity and energy cost volatility, which could adversely affect its multinational operations - Slowing global economic growth, escalating trade tensions, policy uncertainties, supply chain disruptions, and persistent geopolitical tensions contribute to volatility in global economies and financial markets[86] - Changes in industry trends, market sentiment, asset values, interest rate cycles, and currency environments may pose significant risks to the company's business[87] - As a multinational enterprise operating in Hong Kong, Mainland China, Singapore, Europe, Australia, Canada, and the UK, the company faces potential currency fluctuation risks[88] Regulatory and Compliance Risks The company's operations are affected by regulations across multiple jurisdictions, including political, social, legal, tax, regulatory, and environmental requirements, with economic sanctions, data protection laws, and cybersecurity threats potentially leading to additional expenses, business disruption, or reputational damage - The company invests in multiple countries and cities globally, increasingly exposed to the impact of evolving local, national, or international political, social, legal, tax, regulatory, and environmental regulations[89] - Economic sanctions may affect business partners, suppliers, and customers, potentially leading to business termination, supply disruptions, or asset losses[90] - Failure to comply with personal data protection laws may result in regulatory actions or civil claims, leading to financial losses and reputational damage[91] - Cyber fraud, cyber attacks, and cybersecurity breaches could significantly impact the company's operations, business performance, and reputation[92] - The promulgation and revision of new accounting standards may have a significant impact on the company's financial position or operating results[93] Environmental and Social Risks The company faces risks from social events, terrorist threats, geopolitical tensions, extreme weather due to climate change, policy shifts towards a low-carbon economy, natural disasters, and public health emergencies, all of which could adversely affect its global operations - Social events, terrorist activities, and geopolitical tensions may lead to economic losses, supply chain disruptions, and commodity market volatility[94] - Climate change may result in extreme weather, business disruptions, supply chain interruptions, and financial damages[95] - Transitioning to a low-carbon economy may lead to unpredictable changes in government policies, laws, regulatory requirements, financial markets, and consumer behavior[96] - Natural disasters such as earthquakes, floods, storms, and droughts may have a significant adverse impact on the company's business[97] - Public health emergencies (e.g., pandemics) may adversely affect the company's business and operating results[98] - The long-term impact of Brexit remains uncertain, potentially adversely affecting the local economy and the value of the British Pound, thereby impacting the company's UK operations[99] Business Operations Risks Each business segment faces specific operational risks, including construction costs, financing, sales, and leasing risks for property development; government funding, regulation, and tenant performance risks for social infrastructure; cyclicality and demand fluctuations for the hotel industry; market environment, supply chain, cost pressures, and compliance risks for the pub industry; and price controls, regulation, and supply disruption risks for the infrastructure market - Property development involves risks such as rising construction costs, financing difficulties, failure to complete or sell/lease properties on time, buyer/tenant defaults, intense competition, and changes in government policies[100] - Social infrastructure investments are affected by government funding policies, tenant regulatory compliance and operational financial performance, as well as real estate conditions and design changes[104][105][106][107] - Hotel operations are cyclical, influenced by supply and demand, economic growth, interest rates, political environment, taxes, and seasonal factors[108] - The UK pub industry faces risks from changing market environment and consumer demand, supply chain and distribution disruptions, rising cost pressures (energy, food, wages), and compliance with health, safety, employment, and data protection regulations[109][110][111][112][113] - Infrastructure market investments are affected by risks such as price controls, strict regulation, interest and inflation rates, high energy costs, supply disruptions, and intense market competition[114][115] Strategic and Investment Risks The company faces risks in exploring new businesses and investment areas, undertaking acquisitions and disposals, and collaborating with strategic partners, including increased market competition, integration difficulties, regulatory approval uncertainties, cultural differences, and related party transactions, all of which could impact the achievement of its strategic objectives - Exploring new businesses and investment areas faces risks such as intense market competition, insufficient operational experience, and changes in government policies and regulations[117] - Acquisitions and disposals involve risks of inadequate due diligence, regulatory approval uncertainties, integration difficulties, and failure to achieve expected benefits[118][119] - Collaborating with strategic partners may face risks of misaligned interests, changes in equity control, financial difficulties, or unwillingness to fulfill responsibilities[120] - Related party transactions with CK Hutchison Holdings Limited must comply with Listing Rules, potentially leading to unforeseen circumstances and increased risks[121] - Past performance does not guarantee future results, and forward-looking statements involve risks and uncertainties[122] Interim Financial Statements This section presents the company's consolidated financial performance and position for the interim period, including income, comprehensive income, financial position, equity changes, and cash flows, along with detailed notes Consolidated Income Statement For the six months ended June 30, 2025, the company's total revenue (including share of joint ventures) increased to HKD 39.126 billion, but profit attributable to shareholders decreased to HKD 6.302 billion due to a fair value decrease in investment properties and increased taxation Consolidated Income Statement Summary (for the six months ended June 30) | Metric | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Total Revenue (Group + JVs) | 39,126 | 34,727 | | Operating Costs | (20,932) | (17,155) | | Gain (Loss) on Financial Instruments | 1,115 | (207) | | Fair Value Increase (Decrease) of Investment Properties | (542) | 1,420 | | Share of Profits of Joint Ventures | 2,061 | 1,445 | | Profit Before Tax | 8,575 | 9,215 | | Taxation | (2,017) | (608) | | Profit Attributable to Shareholders | 6,302 | 8,603 | | Earnings Per Share (HKD) | 1.80 | 2.44 | - Group revenue increased from HKD 22.008 billion in 2024 to HKD 25.386 billion in 2025[123] - Taxation significantly increased from HKD 608 million in 2024 to HKD 2.017 billion in 2025[123] Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the company's profit for the period was HKD 6.558 billion, with total comprehensive income significantly increasing to HKD 11.623 billion, and total comprehensive income attributable to shareholders at HKD 11.293 billion, primarily due to exchange gains on translating financial statements of overseas operations Consolidated Statement of Comprehensive Income Summary (for the six months ended June 30) | Metric | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Profit for the Period | 6,558 | 8,607 | | Exchange Gain (Loss) on Translating Financial Statements of Overseas Operations | 15,501 | (2,223) | | Gain (Loss) on Derivative Financial Instruments | (9,379) | 2,190 | | Other Comprehensive Income After Tax | 5,065 | (231) | | Total Comprehensive Income | 11,623 | 8,376 | | Total Comprehensive Income Attributable to Shareholders | 11,293 | 8,372 | - A HKD 15.501 billion exchange gain on translating financial statements of overseas operations was recorded in the first half of 2025, significantly boosting comprehensive income[124] Consolidated Statement of Financial Position As of June 30, 2025, the company's total net assets increased to HKD 406.834 billion, with non-current assets including fixed assets, investment properties, and investments in joint ventures all showing growth, while bank balances and time deposits within current assets decreased Consolidated Statement of Financial Position Summary (as of June 30) | Metric | 30/6/2025 (HKD Million) | 31/12/2024 (HKD Million) | | :--- | :--- | :--- | | Total Non-Current Assets | 340,047 | 325,864 | | Total Current Assets | 175,549 | 175,917 | | Total Current Liabilities | 42,770 | 41,332 | | Total Non-Current Liabilities | 65,992 | 60,249 | | Net Assets | 406,834 | 400,200 | | Shareholders' Equity | 394,243 | 387,675 | - Investment properties increased from HKD 150.708 billion at the end of 2024 to HKD 152.857 billion[125] - Bank balances and time deposits decreased from HKD 36.069 billion at the end of 2024 to HKD 33.005 billion[125] Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, shareholders' equity increased from HKD 387.675 billion at the beginning of the year to HKD 394.243 billion, primarily driven by an increase in total comprehensive income, despite dividend payments Condensed Consolidated Statement of Changes in Equity Summary (for the six months ended June 30) | Metric | Balance as at 1 Jan 2025 (HKD Million) | Total Comprehensive Income (HKD Million) | Dividends Paid to Shareholders (HKD Million) | Balance as at 30 Jun 2025 (HKD Million) | | :--- | :--- | :--- | :--- | :--- | | Shareholders' Equity | 387,675 | 11,293 | (4,725) | 394,243 | | Perpetual Capital Securities | 7,929 | 143 | (143) | 7,929 | | Non-Controlling Interests | 4,596 | 187 | (108) | 4,662 | | Total Equity | 400,200 | 11,623 | (4,976) | 406,834 | - Exchange reserve within reserves increased from HKD (5.831 billion) as of January 1, 2025, to HKD (2.165 billion), reflecting exchange gains[127] Condensed Consolidated Cash Flow Statement For the six months ended June 30, 2025, net cash inflow from operating activities significantly increased to HKD 4.297 billion, but substantial net cash outflow from financing activities resulted in a net decrease in cash and cash equivalents of HKD 3.695 billion Condensed Consolidated Cash Flow Statement Summary (for the six months ended June 30) | Metric | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 4,297 | 1,471 | | Net Cash Inflow (Outflow) from Investing Activities | 71 | (3,269) | | Net Cash Outflow from Financing Activities | (8,063) | (7,564) | | Net Decrease in Cash and Cash Equivalents | (3,695) | (9,362) | | Cash and Cash Equivalents at June 30 | 31,093 | 31,419 | - Net cash inflow from operating activities significantly increased year-on-year, from HKD 1.471 billion to HKD 4.297 billion[128] - Net cash outflow from financing activities primarily included net repayment of bank borrowings and dividend payments[128] Notes to the Interim Financial Statements This section provides important supplementary information for the interim financial statements, including the basis of preparation, detailed classification of revenue and profit contributions, profit before tax, taxation, interim dividend, earnings per share, aging analysis, fair value of financial assets and liabilities, and capital commitments - The interim financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and presented in Hong Kong Dollars[130] Total Revenue by Principal Business (for the six months ended June 30) | Business | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Property Sales | 7,366 | 4,635 | | Property Leasing | 3,002 | 3,118 | | Hotel and Serviced Suite Business | 2,192 | 2,130 | | Property and Project Management | 444 | 445 | | Pub Business | 12,524 | 11,823 | | Infrastructure and Utility Assets Business | 13,598 | 12,576 | | Total | 39,126 | 34,727 | Profit Contribution by Principal Business (for the six months ended June 30) | Business | 2025 (HKD Million) | 2024 (HKD Million) | | :--- | :--- | :--- | | Property Sales | 1,768 | 1,821 | | Property Leasing | 2,315 | 2,444 | | Hotel and Serviced Suite Business | 794 | 823 | | Property and Project Management | 182 | 180 | | Pub Business | 629 | 597 | | Infrastructure and Utility Assets Business | 4,576 | 4,098 | | Total | 10,264 | 9,963 | - Profit before tax is stated after deducting interest and other finance costs of HKD 883 million (2024: HKD 666 million), and cost of properties sold of HKD 3.779 billion (2024: HKD 2.362 billion)[133] - Total taxation for the period was HKD 2.017 billion, comprising HKD 431 million for Hong Kong taxation and HKD 1.404 billion for overseas taxation[134] - The Board declared an interim dividend of HKD 0.39 per share, totaling HKD 1.365 billion, consistent with the prior year[135] - Earnings per share are calculated based on 3,499,778,333 issued shares during the period[136] - Trade receivables with an aging within one month amounted to HKD 1.183 billion, and trade payables with an aging within one month amounted to HKD 4.058 billion[137] - Fair value measurements for investments and derivative financial instruments use Level 1 (quoted prices in active markets), Level 2 (observable valuation inputs), and Level 3 (unobservable market data) valuation inputs[138][139] - As of the interim balance sheet date, capital commitments for development of investment properties and other projects amounted to HKD 1.475 billion[141]